Nanoparticle technology represents an effective approach for formulating poorly water-soluble pulmonary medicines. But unfortunately, directly using nanoparticles for inhalation often suffered from the problem of physical instability if they are applied in liquid form, or nanoparticles are likely to be exhaled before deposition if applied in the form of dry powder. In addition, rapid dissolution of nanoparticles will cause the rapid absorption of medicine, which means the rapid clearance of medicine from local lung tissue. To address these problems, a dry powder inhalation formulation composed of nanocrystal-embedded microparticles with hyaluronic acid as matrix excipients was designed for the pulmonary delivery of budesonide. Nanosuspension of budesonide was prepared by using wet milling method and by varying the rotation rate of milling bowl and milling time, three types of budesonide nanosupension were obtained. The nanosuspension was further spray dried with hyaluronic acid into so-called budesonide nanocrystal-embedded microparticles. The crystalline state of budesonide in nanosuspension or microparticles was confirmed by using XRPD and DSC. The morphology of microparticles was observed with SEM and it was shown that the microparticles were round in shape and appeared as wrinkled or crumpled spheres, with some degree of eccentricity. No significant difference between the formulations with different size of nanocrystals was observed. In vitro inhalation performance of microparticles was examined using the NGI system and demonstrated that the obtained nanocrystal-embedded microparticles has good aerosolization properties and suitable size for inhalation.